BeyondTrust on the block?

Contact: Brenon Daly

Less than two years after acquiring BeyondTrust, Veritas Capital is looking to sell the privilege identity management vendor, several market sources have indicated. We understand that the private equity firm has retained UBS to run a narrow process, with the expectation that BeyondTrust would fetch at least twice the price the buyout shop paid in its September 2014 purchase. (Subscribers to 451 Research’s M&A KnowledgeBase can see our estimated terms of that deal by clicking here.)

BeyondTrust is expected to generate about $100m in sales this year and throw off roughly $40m of cash, according to our understanding. Recent transactions involving similar-sized identity and access management (IAM) vendors have gone off at about 6x sales. That’s roughly the multiple we estimate Vista Equity Partners paid for Ping Identity in early June, as well as the estimated valuation Thoma Bravo paid for IAM vendor SailPoint two years ago. (Subscribers to 451 Research’s M&A KnowledgeBase can view our estimated terms of the Ping deal and the SailPoint transaction.)

One reason acquirers have paid above-market valuations for identity-related providers is that cloud technology is predicated on knowing who users are and what they should have access to. That’s been reflected in infosec budgets. In the latest survey of IT security professionals by 451 Research’s Voice of the Enterprise, identity management ranked in the top quartile for security projects in the coming year.

VotE InfoSec priorities Q1 2016

Source: 451 Research’s Voice of the Enterprise: Information Security, Q1 2016